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Edited by Vladimir Popov and Piotr Dutkiewicz
The fact that several third world countries, especially in Asia, have experienced remarkably high rates of gross domestic product (GDP) growth has been a matter of much discussion. There has been talk of a development of ‘multi-polarity’ in the world, a shift in the balance of economic power from the West to the East, and even an overtaking of the traditional metropolitan economies by the newly emerging ones. India has been one of these high-growth economies, and has been branded as an ‘emerging economic superpower’ by many writers both within and outside the country. But even if we leave aside the very recent slowdown in the Indian economy, which is a result inter alia of the world capitalist crisis and which has nevertheless left the country with a fairly respectable GDP growth rate to date, and focus on the high growth phase that preceded this slowdown, the fact remains that this high growth has been accompanied by such an increase in economic inequality and such a process of ‘social retrogression’ that the country faces the real threat of social disintegration.
Outside China, which is implementing a national project of modern industrial development in connection with the renovation of family agriculture, the other so-called emergent countries of the South (the BRICS – Brazil, Russia, India, China, South Africa) still walk only on one leg: they are opposed to the depredations of militarized globalization, but remain imprisoned in the straightjacket of neoliberalism.
Vladimir Popov and Jomo Kwame Sundaram
The chapter reviews catch-up or converging growth in parts of the Global South. By 1950, US per capita national income, adjusted for purchasing power, was nearly five times the world average. Since then, Western Europe and Japan have closed their per capita income gaps with the USA. East Asia, South Asia and some other developing countries have also started to close gaps with the West in recent decades. Thus, after two centuries of growing economic divergence, the world has witnessed an era of uneven convergence between parts of the South and the North. Alternative scenarios and some future implications are considered.
The chapter considers the following questions: Is global economic stability necessary for countries wishing to industrialize and complete their development project? Or does some degree of instability actually benefit economies wishing to change their relative position in the international division of labour? If so, what kinds of stability/instability matter? What insights does recent history provide for assessing current possibilities in this regard?
José Antonio Ocampo
The economic history of Latin America is marked by three essential features. The first is that it was the part of the developing world (together with the Caribbean) the most deeply transformed by colonization, as well as the first to become politically independent in the early nineteenth century (with the exception of Cuba). The second, which it shares with other parts of the developing world, has been its position within the world’s economic system as a commodity producer, a feature, a few countries aside, it has been unable to overcome despite the industrialization drive that took place in particular from the 1930s to the 1970s. This has made the region vulnerable to trends and fluctuations in commodity prices. This vulnerability has been enhanced in different periods by highly unstable and pro-cyclical access to external financing, giving rise to severe crises when these two factors coincided. The third is that it is, together with parts of sub-Saharan Africa, the most unequal region of the world.
Justin Yifu Lin
In post-World War II, East Asia was considered the least hopeful regions for development in the world due to its poor natural endowments and high population density. Against the odds, East Asia has become the most dynamically growing region in the world, substantially closing the gap between the Western industrialized high-income countries. In the chapter, the author shows that economic development is a process of continuous technological innovation and industrial upgrading. The success of the East Asian economies was due to the fact that they have proactive governments enabling their economies to develop according to comparative advantages in a market system and tap into the potential of advantages of backwardness in the process of technological innovation and industrial upgrading. As such, these economies are competitive in domestic and international markets and grow faster than the industrialized high-income countries, enabling them to close the income gap or even catch up with the Western advanced countries.